ComEd saves $200,000 a year with biodiesel fuel

by Ryan F Bradley
October 20, 2005

Electric utility Commonwealth Edison, a unit of Chicago-based Exelon Corp., knows a good energy deal when it sees one. More than four years ago, the company began using soybean-based biodiesel fuel in its utility vehicles, and now estimates it's saving at least $200,000 a year.

Savings, especially in Chicago, are dramatic. On Thursday biodiesel was priced at $3.14 a gallon according to Bell Fuels Inc., ComEd's fuel supplier, compared with $3.56 for regular diesel sold in Chicago.

The primary cause of the price spread is a 2003 Illinois biodiesel tax incentive that provides a sales tax exemption for fuels containing 11 percent biodiesel fuel or higher. This is a huge break, saving 9.75 percent in Chicago, 6.25 percent statewide. ComEd is reaping the benefits.

"As a soft target, I'd say we save about $200,000 to $300,000 a year," said Bill Pettit, director of fleet services at Exelon Co. "Part of this number is from longevity of engines, since B20 burns at a higher octane rate." Higher octane fuel such as B20, which is a blend of 20 percent soybean oil and 80 percent diesel oil, burns hotter and cleaner than regular diesel fuel, as well as having lower levels of particulates, means fewer potential engine problems.

It also doesn't hurt that with oil prices remaining high, biodiesels, tax-exempt or not, are a cheaper alternative. Since the switch to B20, ComEd has even found benefits it can't put a price on.

"Unions almost forced ComEd to go to gas, the fumes with regular diesel were so bad," explained Thomas Murphy, the man responsible for the biodiesel program at Bell Fuels. ComEd consumed 6 percent of the nation's biodiesel fuel last year. Besides being less toxic and headache-inducing than diesel fuel, the soybean blend is safer to handle because it is less combustible.

"We've had great results with biodiesel, and now we want to expand on that success," stated John Skolds, president of Exelon, in a press release.